AstraZeneca and the tyranny of shareholders | Gordon Roddick

When The Body Shop became a public company we lost control to conservative institutions who cared little for its future. We need to find a better way

I first realised there were disadvantages to being a public company when I sat in the very expensive offices of The Body Shop‘s institutional shareholders and told them that we wanted to develop more radical approaches to doing business. We had already developed ethical innovations such as community trade, which involved sharing the profits from some products with the communities that produced them, as well as running many of our challenging campaigns. They weren’t keen.

It was then that I realised how little control we had over the company we had founded. We never faced a hostile takeover bid such as AstraZeneca is facing at the moment, but it often surprises people that the management of a company is not in practice in control of its destiny. In effect the owners are the shareholders, and that doesn’t mean they are benevolent, long-term owners, or interested in innovative plans. Takeovers are decided by shareholders, and are more usually funded by debt which falls on the company being taken over. It is a strange reversal of the ideal.

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